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  5. DCM: Hi 5i Team - Should DCM's recent and steady decline be of concern and is its balance sheet in decent shape. [Data Communications Management Corp.]
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Q: Hi 5i Team - Should DCM's recent and steady decline be of concern and is its balance sheet in decent shape. Also is this a growth stock or more of a value stock. Some time ago it did an acquisition which had an immediate and continuing positive effect on the stock price but the enthusiasm seems to be fading. Do you expect there will more acquisitions in the coming months/years. Also is insider ownership fairly substantial and is it growing or declining. Thanks.
Asked by Rob on October 23, 2023
5i Research Answer:

Small caps have been very weak of late, and its decline is not unique. It is also easy for scared investors to take profits on it, considering it is up 111% in the past year. There hasn't really been any news in a couple of months. The acquisition is progressing well. The stock can still be considered cheap. We would not call it a value trap, but the company needs to execute on its growth plans. We do think management fully knows what it is doing here.  Debt has increased, which likely worries some investors, considering rates and the economy. But cash flow is growing as well. If we move forward, EPS is next year is expected to be 34c. Insiders, at 23%, continue to buy, and participated in the financing in May. With the big acquisition still fairly new, and debt high, we would not expect an acquisition in the short term.